With WTI crude prices up 51% since early February, Macquarie Capital’s Vikas Dwivedi is calling for a short term correction back to the back to mid-$30 to low $30 range.

Dwivedi sees several short term factors impacting the price:

Iran exports up 500 K BPD in the next two weeks

KSA loadings up 300 K BPD vs Q415

Global T/A will reach 5.7 MM BPD in mid April

ETF outflows may accelerate

U.S. crude imports likely to stay at or above 7.5 MM BPD

USD weakness has slowed and reversed

Ceyhan and Forcados crude supplies returning

The analyst said the rally was likely initiated by a combination of institutional and retail capital inflow. The positive price action has been accelerated by several waves of short covering since mid-February. The USO once again has dominated ETF capital inflows adding nearly 40 K contracts of YTD length to the front month WTI futures contact.

Long term they remain bullish on crude and expect WTI to return to $70/bbl per barrel in 2018.